Obama, McCain face oil drilling decision

Wednesday

Aug 27, 2008 at 12:10 AM

After Barack Obama and John McCain claim their parties' nominations, the senators will have to decide whether to back an energy-policy compromise that is uncomfortable for some members of their parties but represents a middle ground where many voters stand.

STEPHEN POWER

After Barack Obama and John McCain claim their parties' nominations, the senators will have to decide whether to back an energy-policy compromise that is uncomfortable for some members of their parties but represents a middle ground where many voters stand.

The plan, put forward by a so-called "Gang of 10" Republican and Democratic senators, would allow oil and gas drilling in some offshore areas that are off limits, a move opposed by many Democratic leaders. The plan would raise $84 billion for various alternative energy and conservation measures, partly by taking away certain tax deductions from oil companies, an idea opposed by many Republicans. Congress is likely to debate the drilling issue in September.

In a Wall Street Journal/NBC poll, respondents expressed strong support for developing alternatives to oil, but 63 percent also said expanding offshore drilling is a step in the right direction. In Washington, the Gang of 10 proposal has drawn criticism from groups on the left and the right. Some Republicans, who support expanded drilling, worry that a compromise with Democrats will deprive Republicans of an election issue.

Tuesday, six more senators — three from each party — signed on to the deal. If members of Congress cannot agree on a drilling plan, that could lead to a government shutdown. Opponents of expanded offshore drilling may try to extend the current moratorium as part of a spending measure required to keep many government agencies running past the end of the fiscal year that ends Sept. 30. That is the same day the current congressional moratorium on offshore drilling expires. A more certain result is that Sens. Obama and McCain will have to define their energy-policy agendas by the stands they take on the Gang of 10 plan.

Sen. Obama said this week at a campaign stop in Wisconsin that he is "willing to consider offshore drilling, but that is not the long-term solution." Sen. Obama has not explicitly endorsed the Gang of 10 deal, but has indicated that he could accept a proposal like it. Members of Sen. Obama's campaign are attacking Sen. McCain for having said he would oppose it.

Sen. McCain, the Republican candidate, has spent months calling Sen. Obama "Dr. No" for opposing increased offshore exploration. But the Arizona senator has criticized the Gang of 10 plan because it would raise taxes on oil companies.

At the center of the legislative maneuvering over the drilling issue are Sen. Saxby Chambliss, R-Ga., and North Dakota Democrat Kent Conrad, one of the first senators to endorse Sen. Obama's presidential campaign. Sen. Chambliss and Conrad collaborated on a massive farm bill that passed Congress this year.

In June, the two senators decided to undertake a similar effort on energy policy to overcome gridlock over high oil prices. "I just walked over to his office and said, 'You and I need to talk "¦ about energy,' " Sen. Chambliss says.

The senators rounded up colleagues from each party, and began hashing out ideas, with advice from Securing America's Future Energy, a Washington nonprofit that advocates tougher automobile efficiency standards, increased domestic drilling and more reliance on biofuels.

To boost oil supplies, the senators agreed to open additional acreage in the Gulf of Mexico to drilling and to allow Virginia, Georgia and the Carolinas to "opt in" to drilling near their coasts if their legislatures approve. To curb demand, they proposed new tax credits worth up to $2,500 to encourage the purchase of fuel-efficient vehicles, and $7.5 billion to help automakers retool factories for alternative-fuel vehicles.

The proposal includes a prohibition on drilling within 50 miles of any state's coastline, which has drawn fire from some drilling supporters. Sen. Lindsey Graham, R-S.C., one of the proposal's supporters, says the buffer zone is essential for his state, where many jobs are tied to beach-related tourism.

"Drilling without state consent would be an absolute political disaster," Sen. Graham said in an interview.

The proposal also does not call for new limits on speculative trading in oil, a top priority for some Democrats. Sens. Conrad and Chambliss say the group disagreed over the issue, and decided to wait for a report by a federal task force assessing what effect, if any, such trading has on prices.

A problem for Democrats is that environmental groups have long opposed expanded drilling. Still, some in the environmental movement say they could accept legislation that expands offshore drilling with strong safeguards. "We're not opposed to offshore drilling everywhere; there may be ways that the line can be drawn that we can live with," said Carl Pope, executive director of the Sierra Club.

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